Investing.com - Gold prices declined on Monday, as trading volumes were expected to remain thin ahead of the New Year holiday.
Heading into the final week of the year, trading volumes are expected to remain light as many traders already closed books due to the holiday period, reducing liquidity in the market and increasing volatility.
Gold for February delivery on the Comex division of the New York Mercantile Exchange shed $5.40, or 0.5%, to trade at $1,070.50 a troy ounce during U.S. morning hours.
Investors kept an eye on upcoming U.S. data to gauge if the world's largest economy is strong enough to withstand further rate hikes in 2016. The U.S. is to release key reports on consumer confidence, pending home sales and jobless claims later this week.
With the first U.S. rate hike since 2006 out of the way, the focus is now on the pace of future rate increases. The Federal Reserve, from its forecasts, is anticipating four rate hikes next year. However, the Fed funds futures currently suggests there will be just two rate increases, one in June and one in December.
Mixed U.S. economic reports released last week failed to offer clues as to how fast the U.S. central bank will raise interest rates next year.
Gold is on track to post an annual decline of approximately 9% in 2015, the third yearly loss in a row, as speculation over the timing of a Fed rate hike dominated market sentiment for most of the year.
Meanwhile, silver futures for March delivery lost 42.4 cents, or 2.95%, to trade at $13.95 a troy ounce. Silver is on track to post an annual decline of 9% in 2015.
Elsewhere in metals trading, copper dropped 3.6 cents, or 1.71%, to $2.088 a pound. The red metal is on track to post an annual decline of 29% in 2015 as fears of a China-led global economic slowdown spooked traders and rattled sentiment.
The Asian nation is the world’s largest copper consumer, accounting for nearly 45% of world consumption.